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Nigeria’s FX increases by 4.06%, hits $34.14 billion in June

Published

5 months ago

June 30, 2024

Nigeria’s reserves have increased steadily, reaching $34.14 billion on Friday after increasing by 4.06% from $32.74 billion on June 3, 2024, according to figures released by the Central Bank of Nigeria.

To support the nation’s energy distribution industry, the government obtained a $500 million loan from the World Bank, as revealed by the Bureau of Public Enterprises in May. The World Bank also disclosed that the nation would get $2.25 billion in assistance to stabilize the economy. The most recent loan rounds increased the nation’s reserves that the World Bank provided to the Federal Government.

“This combined $2.25bn package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.” The multilateral lender stated in a statement.

As a result, in just one month, the external reserves have increased by nearly $1 billion. Due to the nation’s dollar shortfall last year, the central bank was compelled to flog the naira to boost foreign cash inflow.

Following that, the local currency lost approximately 300% of its value in a year, closing at 1,514.31/$ on Friday at the Nigerian Autonomous Foreign Exchange market.

In the first half of 2024, the naira was the world’s worst-performing currency, according to a Bloomberg analysis released on Friday. It stated that the Central Bank of Nigeria’s attempts to fortify the currency had been hampered by devaluation, a lack of dollar liquidity, and market volatility.

Other than the naira, the world’s poorest-performing currencies in the first half of the year were the pound in Egypt and the cedi in Ghana.

“The naira’s performance is the worst among global currencies tracked by Bloomberg beside that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation,” the report noted.

Olayemi Cardoso, the governor of the CBN, said that the central bank was “relatively pleased” with the strides achieved in stabilizing the value of the local currency.

“I do believe that we have more or less seen the worst volatility,” Cardoso told Bloomberg TV.

“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.

To increase the quantity of dollars in the nation and stabilize the value of the local currency, the central bank has implemented several measures. International Money Transfer Operators now have access to the official window for selling foreign exchange, the apex bank stated last week.

The central bank stated in a circular that was signed by Dr W.J. Kanya, the acting director of the Trade and Exchange Department, that the action would allow IMTOs to get naira liquidity through the official window, facilitating the prompt settlement of remittances from the diaspora.

Related Topics:Featured FX Naira Nigeria

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

1 day ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.

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Dangote refinery begins petroleum sales to West Africa

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

In an indication to traders that the activities of its mega-refinery might soon disrupt regional fuel markets, Nigeria’s private Dangote Petroleum Refinery has started exporting refined petroleum products to neighbouring West African nations.

According to a Bloomberg story on Tuesday, a tanker had transported a consignment of petrol from the Dangote Petroleum Refinery to seas off the coast of Togo, a nearby West African nation. The article cited data from Vortexa, Kpler, Precise Intelligence, a port report, and a ship-tracking tool.

According to the source, a CL Jane Austen recently departed west after loading over 300,000 barrels from Dangote.

Recall that Mustapha Abdul-Hamid, the chairman of the Ghana National Petroleum Authority, stated last month that the nation is thinking of purchasing petroleum products from the Dangote refinery in order to reduce the approximately $400 million it spends each month on more costly exports from Europe.

Speaking at the OTL Africa Downstream Oil Conference in Lagos, the chairman of NPA, Ghana, said that by eliminating freight expenses, buying from Nigeria instead of Europe will lower the cost of other products and services.

“If the refinery reaches 650,000bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid said.

Two weeks ago, it was announced that the refinery would start exporting fuel to Namibia, Angola, and South Africa. Four more African nations—Niger Republic, Chad, Burkina Faso, and Central Africa Republic—had also begun talks with the refinery, it was said.

According to a very reliable source who spoke directly to one of our reporters, the management of the refinery with a capacity of 650,000 barrels per day was in the advanced stages of negotiations with the nations to begin lifting petroleum.

“I can confirm to you that talks are actually at the advanced stage with Ghana, Angola, Namibia, and South Africa, while the initial discussion is coming up with Niger, Chad, Burkina Faso, and the Central African Republic,” the source said.

The petroleum product shipment is currently floating off the coast of Lome, which is a well-liked location for ship-to-ship transfers, according to the source.

Furthermore, the final destination of the cargo of the CL Jane Austen is uncertain.

Despite being off Togo, the region is frequently utilised for ship-to-ship transfers, thus the gasoline may eventually be transported elsewhere.

“While the shipment is tiny in the context of the global gasoline market, it signals the ramp-up of Dangote’s production and the potential to export significant volumes of gasoline beyond Nigeria, which could upend regional markets.”

Last month, the refinery sent its first shipment of petrol by sea to Lagos, a neighbouring commercial centre.

Under the regulatory statute, the Federal Government last month terminated the state-owned oil company’s monopoly on purchasing gasoline from the plant for domestic use, but it has permitted the ongoing importation of fuel from the US and Europe.